Ola served notice for bringing back surge pricing in Bengaluru

Ola introduced peak pricing in Bengaluru recently which informs the commuters of the revised tariff per kilometre. In the previous version of peak pricing, the app would show the commuter a multiple of the normal fare if peak pricing was applicable at that point in time.ET Bureau | July 12, 2016, 14:15 IST

BENGALURU: The Transport Department has issued a show-cause notice to app-based cab-hailing service Ola asking it to explain why its licence for running its services should not be cancelled on grounds of violating the licence conditions.

The aggregator had got the licence only on June 19 under Karnataka's new regulations for technology based taxi aggregators notified on April 2. The development might surprise rival Uber which had suspected the transport officials to be favourable in their dealings with Ola. The Transport Department has told Ola, in its notice, that it has been found to have been charging a peak price (surge price) from customers in violation of the rules.

Ola introduced peak pricing in Bengaluru recently which informs the commuters of the revised tariff per kilometre. In the previous version of peak pricing, the app would show the commuter a multiple of the normal fare if peak pricing was applicable at that point in time.

The notice also told Ola that it has also been offering "shuttle" services with maxi cabs of 12+1 seating capacity in Bengaluru. This service, the transport officials said, are in gross violation of not only the new regulations but also of Karnataka's transport norms because only the Bengaluru Metropolitan Transport Corporation (BMTC) can ferry intra-city commuters in view of the fact that city transport has been nationalised.

The Ola shuttle service, which was launched in January this year, is operational from Manyata Tech Park, EGL and the surrounding areas. Ola relaunched its bus shuttle services earlier this month and can be used to customise daily routes for corporate clients.

The notice mentions that the department has received complaints from users about Ola collecting a surge pricing as well as offering shuttle services. The notice, issued last week, has given the cab aggregator a week's time to send in its reply.

The transport commissioner, Rame Gowda told ET that the department is yet to receive Ola's reply. Speaking to ET, additional commissioner of transport (enforcement) HG Kumar said that Ola cabs shouldn't exceed the fare cap of Rs 19.50 per km for AC cabs and Rs 14.50 per km for non-AC cabs. The notice says, Ola has given an undertaking promising not to exceed this cap while taking the licence. Ironically, just two weeks ago, Ola heaped praise on the Karnataka government in its affidavit before the High Court saying the April 2 regulations had been framed with the primary object "to promote and ensure the safety of the user-riders availing the services of aggregators."

When asked if the Transport Department had not checked about surge-pricing with Ola while issuing the licence, Kumar said, "They were not charging peak pricing when they were issued the licence. They had ceased surge pricing at the time. But they have started this concept of 'peak pricing' now and it is not within the limits set out by us."

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In 2018, automobile demand remained robust despite the slowdown overcast in the last three months of year. All segments reported strong double-digit growth in the calendar year ending December 31 except passenger vehicles which reported a growth of 5 per cent. Three-wheelers sales grew fastest followed by commercial vehicles, two-wheelers, and passenger vehicles. The overall automobile sales crossed 26.7 million units for the first time.

In 2018, automobile demand remained robust despite the slowdown overcast in the last three months of year. All segments reported strong double-digit growth in the calendar year ending December 31 except passenger vehicles which reported a growth of 5 per cent. Three-wheelers sales grew fastest followed by commercial vehicles, two-wheelers, and passenger vehicles. The overall automobile sales crossed 26.7 million units for the first time.